Arbitration in the Kingdom of Saudi Arabia

An important consideration for foreign companies investing in the Kingdom of Saudi Arabia or contracting with Saudi companies or entities of the Government of the Kingdom is how they will resolve potential disputes with their Saudi counterparty. International arbitration is generally perceived by foreign companies to be preferable to relying on the courts in the Kingdom for resolving disputes. However, even if they are willing to agree to arbitration, Saudi counterparties are not always prepared to accept arbitration outside of the Kingdom. This article explains the law applicable to Saudi-based arbitration, as well as some recent developments at the Saudi Centre for Commercial Arbitration and sets out some practical considerations to bear in mind when drafting dispute resolution clauses that refer disputes to arbitration in the Kingdom.